Secretary of Labor v. Cemex Construction Materials South, LLC (Commission decision, June 21, 2023)

Plain-English summary

Postal records showed that a proposed assessment was delivered to Cemex at the correct address, but Cemex had no record of receiving it. The delivery confirmation contained “COVID” in the signature block, and the exact confirmation method was unclear. Cemex moved to reopen within 30 days after MSHA mailed a delinquency notice, and the Secretary did not oppose the request. The Commission majority found good cause and good faith, reopened the assessment, and remanded the case. Commissioner Baker dissented because delivery to the company was shown and Cemex did not explain why the assessment was not routed to the responsible person.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a)
• Outcome: The final assessment was reopened and remanded over one Commissioner's dissent.
• Key point: The majority treated uncertain COVID-era delivery confirmation and a prompt motion as good cause, while the dissent focused on the operator's internal routing duty.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVE., N.W., SUITE 520N

WASHINGTON,
DC 20004-1710

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH    

ADMINISTRATION
(MSHA)         

v.

CEMEX
CONSTRUCTION MATERIALS

SOUTH,
LLC

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Docket
No. CENT 2021-0207

A.C.
No. 41-04827-536222

BEFORE: Jordan,
Chair; Althen, Rajkovich, and Baker, Commissioners

ORDER

BY: Jordan, Chair;
Althen and Rajkovich, Commissioners:

This
matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2018) (“Mine Act”). On September 21, 2021, the Commission received from Cemex Construction Materials South, LLC (“Cemex”) a motion seeking to reopen a penalty assessment that had become a final order of the Commission pursuant to section 105(a) of the Mine Act, 30 U.S.C. § 815(a).

Under section 105(a) of the Mine Act, an
operator who wishes to contest a proposed penalty must notify the Secretary of Labor no later than 30 days after receiving the proposed penalty assessment. If the operator fails to notify the Secretary, the proposed penalty assessment is deemed a final order of the Commission. 30 U.S.C. § 815(a).

We
have held, however, that in appropriate circumstances, we possess jurisdiction to reopen uncontested assessments that have become final Commission orders under section 105(a). Jim Walter Res., Inc., 15 FMSHRC 782, 786-89 (May 1993) (“ JWR ”). In evaluating requests to reopen final orders, the Commission has found guidance in Rule 60(b) of the Federal Rules of Civil Procedure, under which the Commission may relieve a party from a final order of the Commission on the basis of mistake, inadvertence, excusable neglect, or other reason justifying relief. See 29 C.F.R. § 2700.1(b) (“the Commission and its Judges shall be guided so far as practicable by the Federal Rules of Civil Procedure”); JWR , 15 FMSHRC at 787. We have also observed that default is a harsh remedy and that, if the defaulting party can make a showing of good cause for a failure to timely respond, the case may be reopened and appropriate proceedings on the merits permitted. See Coal Prep. Servs., Inc., 17 FMSHRC 1529, 1530 (Sept. 1995).

MSHA records indicate that the proposed
assessment was mailed via the USPS to the operator on June 8, 2021. USPS recorded the date of delivery as June 16, 2021. On July 16, 2021, the proposed assessment was deemed a final order of the Commission because the operator had not filed a Notice of Contest within 30 days. On August 31, 2021, MSHA mailed a delinquency notice to the operator.

Cemex does not dispute that the assessment
was mailed to the correct address. However, Cemex has no record of receiving the assessment. The Secretary has provided a delivery confirmation, which contains “COVID” in the signature block. The exact method of delivery confirmation is unclear. The Secretary of Labor does not oppose the request to reopen.

We note that the motion to reopen was
timely filed. The Commission has previously held that “[m]otions to reopen received within 30 days of an operator’s receipt of its first notice from MSHA that it has failed to timely file a notice of contest will be presumptively considered as having been filed within a reasonable amount of time.” Highland Mining Co., 31 FMSHRC 1313, 1316-17 (Nov. 2009).  Here, the motion to reopen was filed on September 21, 2021, within 30 days of the operator’s receipt of the delinquency notification, mailed on August 31, 2021. Therefore, the motion to reopen was filed within a reasonable amount of time.

Having
reviewed Cemex’s request and the Secretary’s
response, we find that Cemex has demonstrated good cause for its failure to timely respond and acted in good faith by timely filing its request to reopen. In the interest of justice, we hereby reopen this matter and remand it to the Chief Administrative Law Judge for further proceedings pursuant to the Mine Act and the Commission’s Procedural Rules, 29 C.F.R. Part 2700. Accordingly, consistent with Rule 28, the Secretary shall file a petition for assessment of penalty within 45 days of the date of this order. See 29 C.F.R. § 2700.28.

/s/
Mary Lu Jordan

Mary Lu Jordan,
Chair

/s/ William I.
Althen

William I. Althen,
Commissioner

/s/
Marco M. Rajkovich, Jr.

Marco M.
Rajkovich, Jr., Commissioner

Commissioner Baker, dissenting:

I
respectfully dissent.

In the
past, the Commission has held that where a failure to contest a proposed assessment results from an inadequate or unreliable internal processing system, the operator has not established grounds for reopening the assessment . See, e.g., Shelter Creek Capital, LLC , 34 FMSHRC 3053, 3054 (Dec. 2012); Oak Grove Res., LLC , 33 FMSHRC 103, 104 (Feb. 2011); Double Bonus Coal Co. , 32 FMSHRC 1155, 1156 (Sept. 2010).

As set
forth in the majority opinion, the Secretary provided USPS documentation showing Cemex received its proposed assessment on June 16, 2021. On July 16, 2021, the proposed assessment was deemed a final order of the Commission. Following receipt of a delinquency notice, Cemex filed a Motion to Reopen. It concedes that the proposed assessment was delivered to the correct address but alleges that it has no record of the delivery. In short, after delivery the assessment was not routed to the person at Cemex responsible for its processing. Cemex provides no explanation for this failure.

Commission
Procedural Rule 25, 29 C.F.R. § 2700.25, provides that “[t]he Secretary, by certified mail, shall notify the operator or any other person against whom a penalty is proposed of the violation alleged, the amount of the proposed penalty assessment, and that such person shall have 30 days to notify the Secretary that he wishes to contest the proposed penalty assessment.”

The
USPS receipts show Cemex, as an entity, received the assessments. Therefore, the Secretary delivered the assessments as required pursuant to Commission Procedural Rule 25.  Once Cemex received the assessment, it was responsible for ensuring that it was reviewed by the appropriate personnel and processed in a timely manner. Its failure to do so demonstrates an inadequate or unreliable internal processing system.

Therefore,
I would find that Cemex failed to establish good cause and deny Cemex’s motion to reopen.

/s/
Timothy J. Baker

Timothy
J. Baker, Commissioner

Distribution:

Michael
T. Cimino, Esq.

Jackson
Kelly PLLC

P.O.
Box 553

Charleston,
WV 25322

[email protected]

April
Nelson, Esq.

Associate
Solicitor

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Emily
Toler Scott, Esq.

Counsel
for Appellate Litigation

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Melanie
Garris

USDOL/MSHA,
OAASEI/CPCO

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Chief
Administrative Law Judge Glynn F. Voisin

Federal
Mine Safety Health Review Commission

Office
of the Chief Administrative Law Judge

1331
Pennsylvania Avenue, NW Suite 520N

Washington,
DC 20004-1710

[email protected]